Monday, August 1, 2011

Keys to competition of tablet PC panel - FFS yield for short-term, LTPS development for long-term

TAIWAN: In addition to changing the using habits of electronic products among consumers, the rise of smart phones and tablet PCs also restarted the pursuits of new technology, new process and new investment in the matured panel industry.

As indicated by the research institute WitsView under TrendForce, by taking into consideration the current design trend of mobile device, the control over FFS yield and the devotion to the development of LTPS among panel makers will become the keys for conquering new territories in the market of mobile device panel in the next one or two years.

Due to the popularity of Apple iPad, FFS wide viewing angle has become the most discussed panel technology during this past year. After the confirmed alliance between CPI and PVI, the control over FFS wide viewing angle technology has been in place among global major panel suppliers such as Samsung Electronics, LG Display and CMI (in Apple iPad supply chain), HannStar (active transformation to mid-to-small sized products), and Chinese panel maker BOE.

Eric Chiou, research director of WitsView, thinks that it is indisputable that FFS has become the main stream wide viewing angle technology for mobile device panels. However, as compared to the production yield of over 90 percent for large-sized panel, currently the yield of FFS wide viewing angle panel remains around 60~70 percent. The yield is equivalent to the cost.

In order to make the best out of the advantage of FFS technology, panel makers must try to locate key customers and secure orders, gradually improve production process through stable capacity expansion, and reduce the time needed for yield enhancement such that they can secure the leading position of cost competition as soon as possible. In short, the focus on FFS technology in the industry must be raised to the higher standard of “better yield or not” from the “do we or do we not have the technology” level in the past!

As for maintaining mid-to-long term competitive edges of panel makers, based on WitsView’s observation, the control over low temperature poly-silicon (LTPS) process will be another important indicator. Due to the popularity of high resolution panel of Apple iPhone 4 with the so-called “retina” technology, it has been predicted that new generation of iPad product adopting resolution as high as 260 ppi (pixel per inch) will be introduced as early as Q4 this year. It is expected that non-Apple brands will respond with products with comparable or superior specifications and start a new wave of resolution war.

Facing this climbing demand for high resolution panels, tradition amorphous silicon (A-Si) process may be insufficient. Market demand for LTPS process will grow significantly such that this could be the entry barrier in the future for panel makers to penetrate the market of mid-to-high end tablet PCs.

Chiou has also pointed out that there are two major entry barriers of investment and technology behind LTPS. As for the capital requirement of new investment, undoubtedly it can be a heavy burden for current panel makers with poor profitability. As for the technology, the competitiveness of Japanese panel makers has been fading because they failed to keep up with the pace of capacity expansions.

However, the rise of LTPS process has provided Japanese makers with solid technology foundations (such as Sharp and Hitachi) with a great opportunity to get back to the main stream market. Relatively speaking, this also indicates that in addition to the price and quantity threats from Korean makers, Taiwanese makers must again face the challenges from Japanese makers with technology advantages in the process of fighting for the market of mobile device panels.

Mobile devices have led to rejuvenation effect of the development of panel industry. Yet with the challenges of technology development, process yield, and investment strength, there could be a re-shuffle of competitiveness and market shares among panel makers. WitsView has suggested that, even with existing LTPS mass production capabilities among Taiwanese panel makers, the product size must be enlarged for tablet PC application in order to prepare in advance for the predicted growing demand for high resolution tablet PC panel in 2012.Source: WitsView, Taiwan.